Home singapore Adulting 101: My friends have made thousands overnight trading NFTs, but is the hype too good to be true?

Adulting 101: My friends have made thousands overnight trading NFTs, but is the hype too good to be true?

Adulting 101: My friends have made thousands overnight trading NFTs, but is the hype too good to be true?

Adulthood is an invigorating stage of life as young people join the workforce, take on more responsibilities and set their sights on the future. But its many facets — from managing finances and buying a home to achieving work-life balance — can be overwhelming.

In this series, TODAY’s journalists help young Singaporeans navigate this stage of their lives and learn something themselves in the process.

By Justin Ong Published February 5, 2022 Updated April 11, 2022 Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn

SINGAPORE — Even as someone who is generally sceptical of anything that sounds too good to be true, I could not ignore the chatter around non-fungible tokens (NFTs) that had been growing around me over the past few months.

Friends have told me that they earned thousands of dollars overnight from trading these new digital assets representing real world objects, while many articles have been shared on how simple graphic designs, mundane photos and even a tweet have been sold using this medium for as high as seven-figure sums. 

How could NFTs, which seem to have no intrinsic value, end up fetching such exorbitant amounts?

So I went on YouTube last month to watch a few videos to find out what NFTs are and how they work.

The “fungible” in NFT refers to something that is replaceable by another item that is the same. If you swap one S$10 note for another, you have the same thing.

When something is non-fungible, it simply means that the asset is unique and cannot be interchanged. Examples include the Mona Lisa. If you found yourself the proud owner of the Leonardo da Vinci’s famous painting, you can’t swap it for another one.

In much the same way, NFTs are assets with a unique digital signature that exists on a public ledger called a blockchain, which keeps a record of all the transactions relating to the NFT.

This digital signature means that every NFT is unique, with no two being alike, meaning that someone can now own a digital art image, video, musical piece, and even a tweet. Even if someone else has a digital copy of the artwork, they do not have the “original” copy tagged to the NFT and recorded on the blockchain. 

NFTs are traded using cryptocurrencies. The main ones are ethereum (S$3,815 per unit) and solana (S$142 per unit). 


So how does the above translate to a money making venture? I spoke to a friend I met in National Service, who dabbles in NFTs, to find out more. 

While his day job is in the healthcare sector, he spent some time looking into the fad at the end of last year, and bought an NFT worth 0.6 solana in September before and selling it for one solana. In doing so, he earned about S$100 given the value of the currency at that time. 

While this was “nothing much” to him, he soon made his biggest windfall last October, purchasing an NFT of a gaming avatar worth one solana, and selling it for 10 solana, earning himself more than S$2,000. 

While he was over the moon at that time, he was quick to alert me to the potential dangers of trading NFTs. 

For one thing, there is a higher chance that the NFT will depreciate or stay stagnant in value rather than appreciate.

For instance, he has bought NFTs only to see them plummet from five solana to one solana overnight. The prices are also not determined by the number of buyers and sellers but rather by the “hype” that surrounds the NFT built up by the online community, and so they can be a lot more volatile. 

Another worry is hackers infiltrating the purchasing platforms, partly because there are no regulatory bodies safeguarding the process. He once pumped in seven solana (close to S$2,000 at that time) into buying an NFT, only to realise he had mistakenly sent the payment to a hacker who was impersonating the seller. 

In other words, while the blockchain authenticating the uniqueness of the NFT is watertight, the means of trading NFTs is not necessarily so.

“It was super heartbreaking that night, and I couldn’t sleep,” he said. While he was refunded the money by the sellers out of goodwill, this was a wake-up call for him to be more vigilant. 

“People say NFTs are a scam but I think these scams are everywhere, you just have to be careful… it comes with a bit of experience.” 

He said he spends about seven hours a week reading up and engaging in NFT content online to stay up to speed with the latest trends and developments. 

He has invested up to S$2,200 on one NFT but thinks it is a good investment that could bring extraordinary gains.  

But he warned: “Don’t play with the money you are not willing to lose.” 

Another friend that I spoke to, who is a master’s student at a local university, said that she had read up extensively on the trend but decided it was not worth taking the leap due to how NFTs seem to be “over-hyped” now. 

“A lot of people (dabbling in NFTs) are new adopters, so you will have a very short spike at the start (but) at some point it will dry up,” she said. 

She added that news articles on NFTs that have sold for millions of dollars have also captured the public’s imagination, but they do not give the full picture on the fad, and that there are plenty of NFTs that don’t appreciate in value. 

“But are you going to have an infinite number of people that can pay S$1 million for an NFT? It’s very temporary,” she said.  


After these various conversations with friends, I still could not shrug off the feeling that this entire fad, with all the hype that comes with it, was too good to be true. 

So, I reached out to several cryptocurrency experts to ask if NFTs are a worthwhile venture to dip my toes in. 

Mr Coby Lim, principal trader from trading platform provider Floating Point Group, said that NFTs have made dealing with cryptocurrencies far more accessible and relatable to the common person, by making crypto “come to life” given their association with artworks, music and other media. 

“In the past month, I sense that more of those who are into pop culture have been drawn into (buying NFTs), such as those who like limited edition shoes,” he said.

“NFTs have a visual aspect to it… the ability to own it, there’s a digital signature saying that it’s yours… it gives them satisfaction.” 

Agreeing, Mr Hong Qi Yu, founder of crypto exchange platform Tokenize Xchange, said that other than just being a collector’s item, NFTs also allow owners to be part of exclusive communities. 

For instance, those who have purchased NFTs from a certain collection are all part of the same community that can chat online and share insider information on NFT deals, or even have physical meetups. 

“Being able to signal to the world that you are a part of an exclusive community with the likes of Justin Bieber, Stephen Curry and Post Malone for example, has great value, similar to having a blue check mark on Instagram,” he said. 

If owning the NFT is not the end goal, then investing in them to sell at higher values also presents money making opportunities, but the lack of regulation makes the NFT space a prime target for scams and frauds. 

Mr Seh Huan Kiat, fintech director of stockbroker PhillipCapital, said that scams such as the one that my friend fell for have also become increasingly common.

Sellers will promise NFTs upon receiving payment, but then disappear after they make the trade. Without the sellers, the NFT loses its value as there is no longer a community behind the creators to “hype” the product up. 

“There’s no regulation, no one actually knows if (sellers) will deliver,” he said. 

He added that those who are investing in NFTs should do so as a learning experience rather than be too caught up in making a quick buck, since it is an emerging space and there are no clear cut rules yet. 

“Essentially if I’m spending S$400 on an NFT, I don’t expect to get any return out of it,” he said. 

Other than as an investment strategy, NFTs could also have future applications, said the experts. 

Due to its unique, non-interchangeable nature, NFTs can be used as a means to make large, important transactions while minimising paperwork given that the veracity of the product is confirmed by the blockchain. 

“We could see a day where property ownership can be represented by an NFT or large media companies of the future can sprout from the NFT sets of today,” said Mr Hong of Tokenize Xchange. 

While the experts stand by the possibilities that NFTs present, the authorities are still studying the possible uses for NFTs. 

In a written reply to a parliamentary question last month, Mrs Josephine Teo, Minister for Communications and Information, said that the Government was closely studying the characteristics and attendant implications and risks of new technologies such as NFTs. 

She noted that such technology can be harnessed to either strengthen or pose risks to online safety, consumer protection, privacy and protection of intellectual property, and that international coordination of regulatory approaches to such technology would be crucial, given the “borderless nature of these technologies”. 

As for me, hearing the potential upsides of the technology does leave me excited about its future.

But, on the investment front, the NFT community still seems like a wild and volatile space to venture into, especially for a young adult like me who may not necessarily have money that I am willing to lose. 

For now, I am content with biding my time, and waiting to see what new developments and innovations this nascent NFT space brings. 


Justin Ong is a journalist at TODAY, where he covers manpower, housing, finance and sport.